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Capital and regulation

ICAAP

A bank's own process for judging how much capital it needs for all its risks, reviewed by supervisors.

The Internal Capital Adequacy Assessment Process is where a bank identifies its material risks, including ones not fully captured by the standard rules, and decides how much capital it should hold against them.

Supervisors review it as part of their evaluation, so it links the bank's internal risk view to the capital it is required to carry.

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